Morrow v. New Moon Homes, Inc.

Morrow, Joseph R. and Nikki MORROW Appellants, HOMES, INC.,

NEW MOON and Golden Homes, Inc., Appellees. Mobile Heart

No. 2206.

Supreme Court of Alaska.

March

RABINOWITZ, Chief Justice. appeal questions concerning raises over, personal jurisdiction and the of, a defec- a nonresident manufacturer of purchased in tive home that was mobile from a Alaska seller. resident 1969,Joseph Nikki In R. and October bought a mobile home from Morrow Gold- Homes, a re- en Heart Mobile Fairbanks A plaque on the tailer mobile homes. that side of the mobile home disclosed the Oregon by had been manufactured home Homes, Morrows New Moon Inc. The $1,800,taking out payment a down made purchase for a loan the balance price National Bank of from the First $10,546.- amount of Fairbanks. loan percent per year, was plus interest 9of repaid monthly by Morrows in 72 to be the installments of each. $190.13 purchase,,the Morrows time of the At the that inspected the home and noticed mobile carpeting had not been laid and the Miller, Roy windows were broken. several salesman, them Heart’s assured Golden problems and would be corrected that these good his Miller later made assurances. the mobile told the Morrows trailer”, “. . as “good home was . any as trailer.” warm sale, the moved the Morrows’ After Miller Terrace, set it home Lakeview mobile rented, up space the Morrows had the utilities con- made sure that and Then the troubles started. nected. home’s night first the mobile theOn use, out was in the motor went furnace replaced. fur- and had to electric manufacturer had nace installed had re- been removed someone with an furnace. placed original oil Aschenbrenner, Peter Aschenbrenner J. fit, conse- vent not and The furnace did Saveli, Fairbanks, Snow, and D. Rebecca pipe” vibrated when the quently the “stove Johnson, Christenson, Link, Shamberg Subsequent events was running. furnace Inc., Fairbanks, appellants. for was not malfunction furnace showed Brown, Rice, Patrick T. Hoppner Hed-& primary problem with the mobile home. land, Fairbanks, appellees. days home four after mobile About RABINOWITZ, Before J., up, C. Morrows noticed that and CON- had set been NOR, ERWIN, BOOCHEVER, way not all the the doors did close BURKE, bathtub the windows were cracked. The JJ. dealer, into middle Heart, leaked water bedroom. longer was no Golden roof Apparently, March when the snow on the of 1970 business. New Moon did not melt, began respond the roof leaked. Water to the bank’s letter. through ceiling gaps between the came A short later time the Morrows’ counsel panels, along as well wall notify- New wrote letter to Moon Homes A bottom of the wallboard. short circuit ing Moon that the Morrows intended system; developed in the electrical company hold damages liable lights various times. flickered When breach of warranties. About rained, light fixture came out of water separated, the Morrows with month later hallway. problems in the Other continuing to in the Nikki Morrow live following: mobile included the home pay- mobile home. continued make She together did fit at the interior walls ments to First National she because walls; corners; paneling off the came “couldn’t afford Alaskan rents.” Nikki square; the windows and doors were out of eventually out of the mo- Morrow moved the door frames on the bedroom doors fell home made effort sell or bile but no slide off and the closet would doors it fit to rent it she “not because considered them; glue properly; the curtains had on live in.” In October of 1971 Morrows the kitchen cabinet and finish came off Moon against filed this action both New doors. Homes, Mobile Homes and Heart Golden Despite problems, Morrows all these im- alleging had that defendants breached and mobile home to live in the continued merchantability plied fit- warranties of and Heart payments. Golden make the loan particular purpose in ness for manufactur- of many times Mobile Homes was notified ing selling improperly an constructed having were Morrows the difficulties complaint The further al- mobile home. Miller, Roy mobile with their home. corpo- foreign leged that New Moon “is a salesman with whom Heart Golden Alas- doing business in the ration State dealt, caulking put Morrows had did some the record not disclose Although ka.” does bathtub, he was but otherwise around the in- by which New Moon was the method Finally, before sometime little assistance. action, apparently pending formed of the 1, 1970, Mill- April Nikki Morrow informed copy served of the sum- the Morrows did not fix the mo- that if Heart er Golden complaint upon the Commission- mons it. return home the Morrows wanted to bile Commerce, pa- forwarded the er of Miller the Morrows would said “[h]ave Oregon.1 In its an- pers to New Moon up Subsequent- take it with the bank.” “af- inter alia raised the swer New Moon ly, went out of business. Golden Heart personal firmative defenses” of lack Bank Fairbanks The First National proc- improper jurisdiction and service plight. sensitive to the Morrows’ was more ess. Upon by the Morrows being informed July of No tried in The case was 1973. payments they to make no further intended attorney appeared on behalf Golden home, personnel went bank on the mobile Homes, pro- but the Morrows Heart Mobile home times. inspected several out against present evidence their ceeded 27, 1970, addition, May the bank pri- looking they were Moon because New Homes, Moon Silver-

wrote to New Inc. recovery. marily to the manufacturer New ton, Its Oregon. letter informed testimony of Morrows' offered problems the Morrows Moon of the identify the which tended witnesses four home Moon mobile having their New with Moon question as a New home mobile expected to Moon whether New and asked any evi- presented side home.2 Neither since representative to Fairbanks send a plaque on testified 2. Nikki Morrow procedure 10.05.- authorized New identified home the mobile side of concerning dence Thus, New Moon’s business although the Morrows’ complaint with connections Alaska or the circum- sounded in implied warranties, breach of it stances under which the New Moon mobile also raised a strict claim if home came possession. into Golden Heart’s claim is legally cognizable against New superior granted court the Morrows a Moon. judgment default against Heart, Golden In Clary v. Chrysler Avenue but dismissed their against claim New Fifth Center, Inc., 454 P.2d 244 1969), Moon “for both jurisdiction failure adopted Alaska the Greenman v. Yuba privity failure of contract.” The Mor- Products, Inc.,4 Pozver rule of strict prod appealed rows portion then from that liability, provides ucts superior judgment court’s which dis- their against missed claim New Moon. is strictly in tort [a] liable market, places when article he on the appeal

The heart concerns knowing that is to be used without the remedies which are available to a re inspection defects, proves purchaser to have against mote the manufacturer defect that causes to a human of defective for direct economic loss. being.5 superior court held that the Morrows no legal had claim New Moon be By its ap- terms the Greenman formulation cause were not in of contract plies only product when the defective causes argument Moon. The first ad injury. Since the did Morrows here vanced the Morrows amounts to an any personal injuries not sustain requirement end run around the privity. of were by caused the defects in their mobile complaint The Morrows contend that their home, liability is seemingly strict unavaila- theory a liability asserted of strict in tort. However, ble to them in instant the case. They argue further that should have liability the Morrows argue strict prevailed irrespective any privi of lack of apply should nonetheless in the situation ty of contract between New Moon and themselves, because lack of of a a con where consumer sues manufacturer is not a tract to a strict tort defense liabili solely the for loss attributable to ty claim. It is true in Bachner v. product. manufacturer’s defective This Pearson, (Alaska 1970), P.2d we precise presents of contention held: impression first in Alaska. implied products warranty and strict liability tort issue whether strict in liability sufficiently are similar to re- prompt- should to economic loss has extend quire complaint that a worded in terms legal in ed no small amount of discussion theory of former should be deemed leading judicial opin- journals.6 The two raise a claim theory.3 under the latter Cal.Rptr. P.2d as its A 59 Cal.2d 4. Moon manufacturer. friend of the present Morrows who had been at the time of the sale she stated that understood from 247, quoting v. Yuba Greenman 454 P.2d at the salesman that the home was New Moon Inc., Products, Cal. Power Cal.2d make. The trailer was also described as a Rptr. 697, 700, P.2d security agreement New Moon home in the Speidel, Among articles are: the better papers repair held the bank and in a Liability, Loss and Economic Products up by repair- estimate drawn a mobile home Prosser, (1973) ; ÜGC, 40 Tenn.L.Rev. man. Liability (Strict The Fall the Citadel of Consumer), 15; Annot., 3. 479 n. Minn.L.Rev. 791 cf. Purely Necessity Propriety Instructing Comment, Vexing of Problem of Negligence Liability: An Alternative Theories of or Breach Economic Loss in Products Warranty, Injury Remedy, 4 Hall Where Instruction on Strict in Seton Search of Note, in Economic Loss Tort is Given Products Lia L.Rev. 145 bility Case, Liability Jurisprudence, A.L.R.3d 66 Colum. or injuries insure that cost v. A. M. probably Santor ions or to damage, either to sold 207 A.2d Karagheusian, N.J. property, from defective resulting Motor Seely White (1965), of the products, the makers Cal.Rptr. 17, is borne 63 Cal.2d put pur- them in the channels case, products who Santor former In the injured trade, by the carpeting rather than retailer certain chased from persons ordinarily are by Karagheu- damaged and advertised manufactured protect carpet powerless to themselves.8 immediately after sian. Almost laid, line unusual noticed an was Santor Barely Santor came four months after down, the line became pile it. As wore reject- down, liability holding its strict was appeared. lines two additional worse and Supreme ed Court of California business, gone out the retailer had Since Co., supra. Seely Seely v. Motor White damages the manufacturer sued Santor purchased a truck manufactured White warranty mer- implied breach of heavy duty his haul- Motor Co. for use decision, the chantability. unanimous possession of Upon taking ing business. held Supreme Jersey Court of truck, Seely that it bounced vio- found purchaser of ultimate plaintiff, as the lently. “galloping” for 11 continued carpeting, maintain ac- defective could months until truck’s brakes failed and on either of tion overturned, sustaining truck in excess theories, breach two $5,000 damages. Seely was in- liability in or strict reasonable fitness jured in the incident. Privity of was not neces- contract tort seeking Seely sued White Motor Co. theory, sary pursue al- order either damages repairing the truck cost though damages limited to loss of pur- money paid for both the on the opin- Although carpeting. value price profits lost in his busi- chase and the advertising emphasized widespread ion he unable to make nor- ness because by Karagheusian, the Santor carried on Supreme use of the Court mal truck. The “strict made clear that court affirmed the trial court’s of California upon advertising tort not conditioned damages in the amount award promote sales.”7 payments plus profits, lost on the made grounds had that Motor Co. White . presents his the manufacturer [W]hen express warranty Seely, breached an accompa- public for sale he goods to the purchaser. majority opinion, The ultimate representation with a nies them Traynor, con- written Chief Justice intended safe for the are suitable application demned broad dicta SantoFs representation . . . use. [S]uch liability to a case principles strict in- implicit in their regarded as be must volving only economicloss: . . . The presence the market. on that the law has drawn The distinction thus be- manufacturer obligation of the inju- recovery physical between tort ought be—an justice what comes warranty recovery for economic ries and enterprise which should liability, and one rest arbitrary is and does not on loss not the law depend on the intricacies of having liability plaintiff of one ‘luck’ purpose of sales. ; Note, (1967) ; Comment, Willamette L.J. 402 L.Rev. 917 Manufac Privity: Economic Loss Demise Vertical to Remote Purchasers turers’ Code, Damages Contract?, Commercial Under Loss’ ‘Economic Uniform — Tort W. L.Rev. Hofstra 114 U.Pa.L.Rev. 539 (4th 1971). Prosser, subject Note, ed. Law Torts include: Other articles on Oregon: Liability in Present and Future, (1972); 7. at 207 A.2d 312. Comm L.J. 8 Willamette Note, ent, Creighton (1974) ; L.Rev. 396 omitted). (citation Products, A.2d at 311-12 Loss Economic from Defective have causing physical injury. The considered whether accident strict rests, rather, tort liability under- should extend to distinction on an instances prefer loss.10 standing responsibil- nature of the of economic We also the re- ity Seely, although reasoning sult in our manufacturer must undertake dif- products. appro- emphasis distributing slightly his fers from that of He can inju- priately physical Seely be held liable for court. Under the Uniform Commer- given by requiring ries caused defects his cial Code manufacturer safety right de- to match standard of to avail himself of certain affirma- fined terms of that create tive minimize his lia- conditions defenses which can bility Specifi- a purely unreasonable risks harm. He cannot loss. performance opportuni- be cally, held for the level of the manufacturer has products 45.05.100, ty, pursuant his consumer’s business to disclaim product unless agrees liability he de- limit and under AS 45.05.230 signed to remedies, although meet consumer’s demands. the consumer’s the Code A provides consumer not be at the charged should further such disclaimers bearing will of the manufacturer with be oppressive limitations cannot be so as to buys the risk physical he when unconscionable and thus 45.05.- violate AS product can, addition, on how- the market. He 072. In the manufacturer is enti- ever, charged fairly with the risk tled reasonably prompt from notice product will not match his economic consumer of the claimed breach of warran- expectations ties, unless the pursuant manufacturer to AS 45.05.174(c)(l).11 agrees that it will.9 view, recognition our doctrine of Seely appears enjoy support liability strict in tort for economic loss the vast majority of the seriously other courts jeopardize would the continued Cal.Rptr. Only decision, 9. 45 403 P.2d at 151. one case follows the Santor Harley Cova v. Davidson Motor See, Bright g., Goodyear e. Tire Mich.App. 602, N.W.2d (9th 1972) Rubber F.2d 240 Cir. Notwithstanding privity, lack of other courts (buyer allegedly having of an automobile permitted have suits the manufacturer defective tires could not sue under California product, misrepresentation of a based on a law the tire manufacturer in strict theory, product widely where the has been buyer allege because the did not he had suf buyer advertised and the vertising. on the ad relied physical injury) ; Lilly fered Eli & Co. See, g., e. Ford Motor Co. v. Casey, (Tex.Civ.App.1971) 472 S.W.2d 598 Lonon, 217 Tenn. 398 S.W.2d (buyer may of weed control chemical not sue Randy Knitwear, Inc. American liability theory a strict Cyanamid Co., N.Y.2d N.Y.S.2d damages loss); to recover for economic Mel misrepre N.E.2d ody Mfg. Morrison, Home v.Co. 455 S.W.2d theory application sentation has no here be (Tex.Civ.App.1970) (purchaser house of showing cause the Morrows made no have strictly trailer cannot hold manufacturer liable they on, of, were aware relied ad or only injury loss) ; in tort where was economic by vertising New Moon. Rhodes Pharmacol Co. v. Continental Cam Ill.App.2d 362, disclaimer, liability N.E.2d 11. These limitation and (3966) (damages leaking rights for aerosol cans notice abrogated are not manufacturer by privity could not be from recovered the manufacturer the relaxation of re liability, quirement warranty liability, of the cans on the basis of strict the realm of proceed theory might, but held that could case of and within of on the confines the doctrine implied warranty unconscionability, breach of fitness) of Price of be available to the man Gatlin, (1965) purchaser suing Or. ufacturer the remote (wholesaler theory implied could be held to liable the on a of will warranties. We buyer liability theory subsequently. on a strict for economic treat this matter in more detail loss). Annot., Comment, Vexing are The cases collected in See Purely The Problem the of Privity Liability: of as Contract Essential in Action Economic Loss In Products Against Injury Remedy, Remote An Manufacturer or Distributor Search 4 Seton of Injury Causing for Defects Not Goods to Hall L.Rev. Property, Person or to Other 16 A.D.R.3d economically principal theory viability rights. liability The of advocat- of these The by theory of ed the at trial injured would have a Morrows was that New consumer legislature Moon had statutory our breached warranties redress not envisioned U.C.C., operation strict arose by which with the it since law when enacted completely unre manufacture liability remedy be and distribution of this mobile would disclaimer, liability Specifically, rely upon limitation home. strained Morrows Further, manufac AS 45.05.096and the Uni- provisions. and notice AS 45.05.098of longer the Uniform form as in Alas- turers could no look to Commercial Code enacted provide provides to The section for an provisions ka. former Commercial Code liability potential implied “merchantability” in predictable warranty definition Code;14 short, adop goods governed loss. the sale of direct economic for implied warranty for liability an of strict the latter establishes tion of the doctrine leg contrary goods particular be to that the are fit for the loss would economic purpose they purchased.15 for islature’s when authorized which intent risk remedy superior and limitations was of the view aforementioned court operated only II of provisions of Article these Code for allocation warranties- liability, directly purchasing To extend strict tort the benefit those Code. in effect be case would reach Morrows’ from manufacturer or seller. Since on assumption legisative prerogative Morrows were not of contract clearly Moon, superior articu part con- our and would vitiate with New court theory statutory decline AS rights.12 lated we cluded that a based on Thus, theory of strict hold that the and could not serve we 45.05.096 45.05.098 do. AS recognized liability liability. in tort which we as a basis for does Clary not extend the consumer question that de is little There only

suffers loss because of mobile applies the distribution goods.13 Code fective Clary consumed drink be Avenue value of food or for 12. Our decision Fifth premises Chrysler Center, is a sale. or elsewhere on 454 P.2d either liability (b) approved least 1969), must at merchantable strict Goods to be we which objection pass injuries, (1) trade personal to the in de without was not in tort for description; rogation rights, the contract for the reason under of these goods, fungible right (2) be of fair or disclaim the case has no description; injury. average quality within the limit ordinary purposes (3) provides are be fit such restrictions Code unconscionable, 45.05.230(c), used; prima are facie. run, permitted upheld by (4) rarely the courts. within the variations and kind, Braucher, quality, agreement, generally, of even Unconscionable among Terms, quantity units all within each unit Contract or 31 U.Pitt.L.Rev. involved; ; Lauer, (1970) Under Sales Warranties contained, packaged, Code, (5) adequately 30 Mo.L.Rev. Commercial Uniform Unconseiondbility requires; ; Leff, agreement (1965) and the labeled promises Emperor’s Clause, (6) 115 U.Pa. conform to the or affirmations Code — The Unconscionability, (1967) ; Murray, label. made the container or L.Rev. of fact 100), scionability, (§ (c) excluded or modified 31 U.Pitt.L.Rev. Unless Uncon may Spanogle, Analyzing from arise Unconscion warranties usage ability Problems, dealing trade. course U.Pa.L.Rev. provides: 15. AS 45.05.098 Co. v. Matthews See also Hawkins Constr. contracting has If seller the time the at 643, Inc., 546, Co., 209 N.W.2d 190 Neb. particular purpose to know a reason (1973). 651-54 required goods the and that the are judg- buyer relying provides: is the seller’s skill or on 14. AS 45.05.096 goods, 100), (§ (a)Unless there furnish suitable ment to select or excluded or modified is, goods 100 warranty § modified under unless excluded or merchant- the shall be implied warranty chapter, the implied sale if of this an in a their is contract able purpose. goods goods respect fit for that shall be the seller is a merchant with serving this the of that kind. Under section

287 ‘ chantability mer- qualifies New as a and fitness run homes. Moon from manu meaning only facturer chant” within the the relevant to those with the man whom homes, 45.05.042, section, is in privity AS mobile ufacturer of contract ? movable, de- being highly “goods” as Although criticized,22 sometimes Further, in fined in AS 45.05.044.16 the distinction between horizontal and Willman, George P.2d 103 379 privity significant vertical is in this case. warranty 1963), implied held that we the The issue of privity horizontal raises the the quality merchantable established question persons whether other than the predecessor, Code’s Sales the Uniform buyer of goods defective can recover from Act,17 fully applicable was to the sale buyer’s warranty immediate seller on a mobile is homes.18 The result no different theory. question privity is vertical under AS 45.05.096 and AS 45.05.098 parties whether in the chain distributive the Code.19 prior to the seller be immediate can held It equally purchaser is clear that this in liable the ultimate for loss Morrows, j pur product.23 urisdiction the as immediate caused the defective chasers, can recover their seller Code addresses the matter of horizontal implied 45.05.104, breach of the extending Code’s warranties. AS Indeed, theory upon was any this which the claim for relief judgment against person family default “. Golden Heart . . who is in or predicated.20 guest Mobile Homes crit buyer was household of his or is question in expect ical his if it case whether home is reasonable to Morrows, consume, use, as purchasers, person may remote can invoke affect regard the warranties ed . attributable to the manufac . . .” With totally turer passed privity, which arose when New silent Moon vertical Code strictly neutral, party title 3 of the mobile home the next as Official Comment eminently the chain of In other 45.05.104 makes clear.24 distribution.21 words, question implied do the mer The leaves courts warranties of Code to the Apeco Corp. Bishop Inc., Co., Homes, 16. Mobile v. Northern 491 P.2d Sinka Commercial (Tex.Civ.App.1974). (Alaska 1971). 506 S.W.2d 711 See 116 Note, Regulation Mobilehomes: Present developed 21. do not The facts this case Reforms, 159, Heeded 27 Stan.L.Rev. 163 mobile whether Moon sold the disclose New (1974) ; Note, Liability — Mobile through directly homo to Golden Heart or Neglected Product?, Memphis Homes event, In either intermediate wholesaler. 92, State U.L.Rev. dispute parties the time do not that at (Sections lodged 17. The Uniform Sales Act transaction in title was 29-1-1 therefore, through A.C.L.A.1949, amended, Necessarily, 29-1-189 as with Golden Heart. S.L.A.1955, 2) eh. 96 until Moon “sold” home within the mean- § effective superseded consequently ing someone, Commercial Code Uniform of AS 45.05.046 to January 1, generated 1963. 10.101 ch. 114 its warranties § S.L.A. sale II 1962. Article Code. Eggen English Phila., Inc., 18. v. M & K 22. Trailers Salvador v. J. H. Pa.Super. (1973), Brokers, Inc., Cal.App. Mobile Home A.2d (1971) ; Spindler, aff'd, 482 P.2d Beck v. 457 Pa. A.2d 903 Minn. 99 N.W.2d Wade Soya, 23. See Kassab v. Central Pa. Chariot Trailer Mich. N.W. A.2d J. R. White & Sum 2d Code, 11-2, mers, Uniform § Commercial 19. Minsel v. El Rancho Mobile Home Cf. Center, Mich.App. 188 N.W.2d Although legislature Alaska’s did not provisions (1971) (applying part of enact Title Official Comments transaction). Code to a mobile home sales necessarily and we do find them con Rent-A-Car, trolling interpreting See also Alaska v. Ford instances Inc. all (Alaska 1974) ; Code, persuasive Motor are of assistance 288 by express liability may of be privity circumscribed

of to which vertical the extent from The required.25 disclaimers the manufacturer. not be contract will or will provi Clary court was concerned that previously con has never court operate a might trap sions as requirement whether fronted unwary,26 expressed preference it pur preclude will privity of of contract theory of for a tort more solicitous original recovering against the from chaser modern, in pre needs of the consumer theory implied war on a place. packaged, mass merchandised market ex previously, As we mentioned ranties. However, preference never in Avenue Clary v. pressly held in Fifth imply tended to that reliance on the statu Inc., Center, 244 (Alas 454 Chrysler tory warranty provisions was not available strictly is ka a manufacturer 1969), that as an for relief. There alternative vehicle injuries attribut in tort for liable incompatible affording paral nothing is goods. approving his able to defective in tort and sounding lel consumer remedies tort, liability in we theory based strict contract, jurisdictions and several efficacy, simplicity, and com stressed adopted liability in tort have strict Appellees prehensiveness theory. implied warranty theory make available an urged this court to limit Clary had regard privity without of contract.27 possible of redress to consumer’s source require dispute here is whether the provisions gov statutory application of the privity ment vertical contract should warranties, particularly AS erning sales This battle has al we abolished Alaska. This we declined to do. As 45.05.096. ready waged many jurisdictions, noted, been statutory scheme have under known; and the results are well the citadel give injured required is notice consumer privity largely toppled.28 has rel warrantor within a of the defect to the time, development of this modern fa course atively potential period short Warranties, application Law Sales 8 the Code. construction California 281, 322-28 Brothers A & & v. Reid U.G.L.A.L.Rev. See Constr. Co. (Alaska 1976) ; Logging Co., 547 Prosser, at 97 655 26. W. Law of Torts § 319, Pearson, 18 n. Bachner v. 479 P.2d 327 1971). (4th ed. Fox, 1970) ; v. Car Rental National Jersey ; example, Ariz.App. 160, (1972) revolutionized 27. For 500 P.2d 1148 18 Smoker, Ind.App. its land with the law of warranties Nat’l v. 153 First Bank Henningsen 71, v. mark decision 203 N.E.2d 286 Bloomfield 358, Motors, Inc., A.2d 161 69 32 N.J. Ill.App.2d v. Motor 51 25. Suvada White yet (1960), embraced strict tort has 318, (1964), aff'd, Ill.2d 201 N.E.2d 313 32 Schipper liability v. Levitt as well. See (1965); 612, 210 Kassab N.E.2d 182 (1965) 70, Sons, Inc., A.2d N.J. 217, Soya, Central 432 Pa. A.2d Karagheusian, N. A. & M. Santor By mean we do not this statement 52, is another . Iowa A.2d J. the matter of horizontal to intimate Compare example. Farm Hut. Auto. State exclusively 45.05.- controlled Anderson-Weber, Inc., 252 Iowa Ins. Co. v. given plaintiff that a is not The fact (warranty (1961) N.W.2d 449 expressly for breach authorized to sue abolished) theory, privity of contract pre provision will not under Corp., 210 N.W.2d Kleve v. General Motors holding possibly at this court from clude tort). (strict Christ But cf. law, date, as a matter of case some future Hospitals, Kaiser Foundation offerson plaintiff requirement is not barred Cal.Rptr. Cal.App.3d Haragan privity. v. Union of horizontal Prosser, supra 1970) ; F.Supp. (D.Alaska at 655 § note 28. W. Oil fallen”) ; privity’ Code, (“. Anderson, has . ‘citadel of § . R. Uniform Commercial Soya, Franklin, 432 Pa. When Kassab v. Central 2-318:6 (“. (1968) all . but . Theories Dis Worlds Collide: A.2d dust”) Annot., Cases, 16 A.L.R.3d crumbled to claimers 18 Stan. Defective-Product (1967) (“. (1966); Eyer, . razed. . all but L.Rev. Impact .”). . . Commercial Code Uniform

289 history products; miliar and we need not recount it only these and the consumer “exceptions” injured length at here.29 Contrived will be them they should prove paid hoary deference to doctrine defective. privity obviating unjust while its results policy The considerations which given years have to an way more recent dictate the privity abolition of largely are open frontal initial attack assault.30 The those which also warranted imposing strict Spence came in Rivers Builders & Three tort on the manufacturer: 120, Masonry Supply, N. Mich. protect consumer’s inability to himself ade (1958), leading W.2d 873 but case quately defectively from manufactured probably Henningsen remains v. Bloom goods, implied assurance the maker Motors, Inc., 358, 161 A.2d field N.J. puts goods when he his on the market (1960), Jersey in which the New Su safe, superior and the risk bearing preme held Court liable for in ability of addition, manufacturer.32 juries property damages and both the man limiting a consumer under the Code ufacturer of an automobile and the dealer implied warranty action his imme who sold the vehicle. The rationale diate seller in those instances when the widespread abolition of require product defect attributable the manu ment privity stems from the structure effectively promote facturer would circu operation and of the economy free market larity litigation judicial and waste of re in contemporary society; succinctly Therefore, sources. we decide that man up ago summed long not Supreme ufacturer bemay held liable for a breach Pennsylvania: Court of warranties of AS 45.05.096 Courts and scholars recog- alike have regard privity AS 45.05.098without typical nized that the consumer does not of contract between the deal length at arms party with the whose the consumer. product buys. Rather, he buys he from The more retail merchant difficult usually who little before this court is

more than an whether we should economic conduit. It is extend this privity not abolition of only to embrace defectively merchant who has not warranty product. personal injuries actions for manufactured the Nor is it property damage usually the but also those for eco merchant who advertises the product nomic large Contemporary loss. have such a at- courts scale been tract more reticent to discard the consumers. We have in our socie- ty requirement permit recovery literally and to large, financially scores of responsible purely a remote consumer for place manufacturers economic is considering their losses.33 In wares in the stream of commerce may sue only realization, we note that economic loss be cat with the but with egorized purpose, into economic loss con avowed direct these loss, sequential a distinction way will find their into the hands of the maintained in the dam- Only Code’s structure of consumer. will use consumer Liability Nutshell, 119, Franklin, in a See When 29. Worlds Collide: Lia 37 Ore.L.Rev. bility Theories and Disclaimers 153-55 Defective- Cases, Product 18 Stan.L.Rev. Soya, 31. Kassab v. Central Pa. ; Prosser, Fall the Citadel (footnote omitted). (1968) A.2d (Strict Privity Consumer), to the Preitz, Jaeger, Privity 6; Miller v. Id. 32. at n. 422 Pa. Minn.L.Rev. Warranty: Soundedf, Has 221 A.2d the Tocsin Duquesne (1963) ; Prosser, L.Rev. Problem, Vexing Comment, Upon Citadel, (Strict Liability Assault Liability: Purely Economic Loss Products Consumer), 69 Yale L.J. 1099 Injury Remedy, An Search of 4 Seton Annot., (1972); evidently At least L.Rev. one time there were Hall Gillam, exceptions. A.L.R.3d A recently confronting courts has number commentator age remedies.34 One overturn the declined to this issue have the distinction: summarized warranty for in actions privity requirement may to be said loss Direct economic principal One factor economic loss.36 on insufficient damage based encompass simply do that these courts seems be thus, loss value; direct economic product reasons which find the social and economic pocket’ difference may of ‘out be —the enterprise liability to the extending justify given and receiv- what is value between property personal injury or victims of difference bargain’ of ed—or ‘loss —the in the a damage compelling case of equally received of what is the value between disappointed buyer suffering "only” eco- Direct eco- represented. as and value its apparent fear There is an nomic loss.37 by may measured also be loss nomic may great- be of far economic losses repair. replacement and Conse- costs of inju- personal magnitude er than value all indi- includes quential loss economic ries, being less and somehow foreseeable resulting loss, profits as rect such loss insurable, under- these losses would less inability of the defec- to make use theory from mining spreading of enter- the risk prise product.35 liability.38 tive is case courts which have the Morrows The claim of Several aspect recently for economic loss. considered this one direct 546, 45.05.220(b) Corp., provides: tas v. General Motors 357 Mass. 34. AS damages (1970) ; Hupp Corp. breach of v. 259 N.E.2d 234 The measure Service, 245, warranty and time Metered Washer Or. 472 is the difference 256 ; acceptance (1970) place ex between value P.2d 816 State rel. Western Seed they accepted Corp. Campbell, 262, goods v. 442 and the value Prod. 250 Or. they (1968) ; Gatlin, Price 241 Or. had had been as war- would have if 315, special (1965) Henry ranted, 405 502 v. John show P.2d unless circumstances 518, damages Sons, proximate W. A.2d amount. Eshelman 99 R.I. 209 different ordinarily Majer, Inc., damages (1965) ; v. Ernie This is the measure of Dimoff 385, (1960). by provided for the consumer Wash.2d 347 P.2d 1056 Code goods purchases accepts sues and and then See, g., State rel. e. ex Western Seed warranted. are not as because the Corp. Campbell, 262, Prod. Or. Frequently is determined the measure (1968) Gatlin, and P.2d Price 241 Or. repairs. White J. reference to the cost of 315, In the latter ease Summers, Commercial Code and R. Uniform tried to elucidate the dis- Justice Holman 10-1 at § opinion concurring tinction in a at 504: “proper 45.05.220(c) provides that in a injury establishing liability may damages consequential re- also be case” have to over- cases courts been motivated damages Consequential defined covered. necessity any privity look because 45.05.222(b) including by AS usually per- hazard and is to life health par- general (1) resulting or from loss major proportions sonal disaster requirements and needs of which ticular financially physically both individual contracting time had reason seller at the something importance of minor reasonably be could not and which know manufacturer or wholesaler otherwise; prevented by or cover protect can themselves a distribu- proxi- (2) injury person property or through price tion of of the article risk resulting mately of war- from breach the same social sold. There has not been ranty. recovery necessity strict to motivate damage consequential fre- most The item of damaged person’s losses where the sought profits quently attributable lost health, earning ca- and therefore his basic warranty breach. J. White and R. Sum- unimpaired. pacity, has remained mers, supra, 10-4 at 319. § Seely v. White Motor Cal. Liability Note, Cal.Rptr. 17, Economic Loss 2d 403 P.2d Products Jurisprudence, 66 Colum.L.Rev. Summers, 38. White and R. J. Uniform Com Chrysler Note, Corp., Code, 36. Koellmer v. Motors mercial 11-5 § at 334 Conn.Cir. 276 A.2d Economic Loss in General Juris Corp. Instruments, prudence, Motors v. Halco Colum.L.Rev. Ga.App. (1971); (1966) Neck S.E.2d and cases discussed therein. arguments tion personal injury found those whether issue have or sim- ply unpersuasive.39 agreement of bargain We are loss resulted in the breach justifica- True, satisfactory warranty. there no- hold that the rule of im- plied warranty which extends gestative stirrings tion for a remedial scheme had its greater appeal action to a consumer suffer- of the per- because ing personal injury property damage But, but sonal claim. once exis- tence, operation denies similar relief to the consumer “for- the field of of the reme- dy enough only direct tunate” to suffer eco- should not be fenced opin- separate nomic loss. Peter’s factor.40 Justice Co., Seely 63 ion v. Motor Cal.2d White implied warranty fear that if the 17, 145, 9, Cal.Rptr. 24, 45 403 152 loss, action is extended to direct economic (1965), persuasively establishes subjected manufacturers will be to and cleavage between economic loss damages for of unknown and unlimited one, types spe- of harm is a each false scope would seem unfounded. The manu- harm cies of can constitute the “over- may possibly scope facturer delimit the whelming misfortune” in one’s life which potential his liability by use of a disclaimer judicial Supreme warrants redress. The compliance with AS 45.05.100or re- Jersey complete Court of New also in sort to the limitations authorized agreement with this view: statutory rights only 45.05.230. These standpoint preclude principle, extending From the we theory of strict lia- perceive tort, bility why impli- no sound reason supra, highly but also make appropriate cation of should at- this theory reasonable fitness extension of implied Further, to the by expanding tached transaction and be actiona- warranties. ble against warranty rights manufacturer where the redress this form harm, defectively product preserve per- made has we “. caused . . the well de- veloped sonal and not actionable when in- notion that the law of contract adequate should put manufacture has a control purely worth- actions for less article in hands of losses and an innocent that the of tort should law con- purchaser paid has trol actions required personal injuries.”41 for We price for it. hold In situations consider- therefore that manufacturer can be justice require ations of held for court to inter- liable direct economic loss attrib- ap- est itself in utable originating implied causes breach his warran- ties, ply principle implied regard without of contract basis, applica- rather than to its between the test manufacturer and the ultimate 39. Lynne Fashions, 602, Spind (1970) ; Carol Inc. v. v. Cranston Beck 182 N.W.2d 800 Co., ler, (3d 543, (1959) ; Print Works 453 F.2d 1177 256 Minn. 99 Cir. N.W.2d 670 Karagheusian, 1972) ; Inc., (stating Pennsylvania law) Chema A. M. Santor v. 44 Co., Lang Cal.App.2d 639, 52, (1965) Motor ; v. Ford v. 246 55 N.J. A.2d 305 207 Corp., Cal.Rptr. (1966) ; (N.D. Manheim v. General Motors Ford 94 805 136 N.W.2d Co., (Fla.1967); Soya, 1965) ; Motor Kassab Hos v. Central So.2d 432 Pa. Co., (1968) ; kins Jackson Crain v. Ford v. Motor Co. So.2d 514 A.2d Motors, Inc., Grimes, (Fla.1953) ; (Tex.Civ.App.1966). Smith Platt S.W.2d 313 Cop (Fla.App.1962) Continental So.2d 239 Karagheusian, Inc., 40. Santor v. A. & M. per Industries, & Steel v. E. C. Inc. “Bed” N.J. 207 A.2d Cornelius, Inc., (Fla.App. So.2d Lang Corp., v. General Motors 136 N.W. 1958) ; Rhodes Pharmacol Co. v. Continen (N.D.1965) ; Note, 2d 805 Economic Loss tal Can Ill.App.2d 362, N.E.2d Liability Jurisprudence, 66 Colum. Farm State Mut. Auto. Ins. L.Rev. Anderson-Weber, Inc., Co. v. 252 Iowa (1961) ; Spence Vexing Purely Comment, Three Problem of N.W.2d 449 Masonry Supply, Liability: Rivers Builders & Economic Loss in Products An Injury Remedy, Cova in Search 353 Mich. 90 N.W.2d 873 4 Seton Hall Harley Mich.App. Davidson Motor L.Rev. required purpose goods for which the error therefore purchaser.42 It was relied on the seller’s and that the consumer ac- the Morrows’ dismiss the trial court furnish select or suit- judgment privi- skill want of against New Moon tion goods.44 litigation the case of able ty. manufacturer, would remote preserves today decision Our appear quite it will be difficult that often to de statutory rights of the of actual or con- to establish element the ultimate liability to potential his fine partic- knowledge essential to this structive express disclaimers consumer, by means warranty. ular legiti limitations, protecting the while failed judge In the case the trial bar consumer expectation of the mate fact, findings to enter written as are re- by on a scale wide distributed quired by Alaska Rule of Civil Procedure fit their in use of retailers conduit We cannot determine from the rights are record The manufacturer’s tended use. course, prevailed whether Morrows would have not, unfettered. Disclaimers theory on a of breach of warran- relevant comport with the limitations must raising ties had the trial court not be so erred in statutory prerequisites cannot privity. barrier the Trial was had within over oppressive as to be unconscionable years ago. two the therefore the meaning On We the 45.05.072.43 AS that, opinion if the dismissal for hand, consumer want of the under the Code other jurisdiction erroneous, is of was also a new trial if he responsibilities has a number of is warranted which the recognize to Morrows will enjoy right of we the action opportunity have the to assert their war- day, is he must not least of which ranty theories free from the confines of give of the breach notice privity. jurisdictional It ruling is to the pursuant to AS 45.05.- the manufacturer brought 174(c)(1). warranty action that we now turn. brought within the under the Code must sought person- The Morrows to establish period prescribed in statute limitations jurisdiction by invoking al over New Moon AS If the action is for breach 45.05.242. statute, long particularly Alaska’s arm AS par implied warranty of the of fitness for (a) provides (4), 09.05.015 : 45.05.098, purpose, by

ticular created AS having A jurisdic- court of this state war- the consumer must establish subject jurisdic- matter has tion over the particular had reason know the rantor remedy arguments against recognize limitation disclaimer or 42. We enjoys compelling or no bar- little from a consumer who abolition of are more place. power injury damages gaining alleged in As the market one of a con- when the many sequential observed: value of the court has nature times the recog- Unconscionability generally See, g., Note, product. has been e. manufacturer’s meaningful an absence of nized to include Economic Lose Products Juris- parties part prudence, to- choice on the one 965-66 66 Colum.L.Itev. today gether speak terms which are un- with contract to the issue We do reasonably party. loss, consequential favorable to the other other than governs recovery Furniture Williams Walker-Thomas note that AS 45.05.222 among U.S.App.D.C. damages requires, F.2d of such (Wright, J.). damages (1965) things, also Unico v. been said must have Owen, by A.2d 405 Adams v. 50 N.J. foreseeable the manufacturer. Corp. Ill.App.2d 388, America Lear Jet 261 N.E. Electronics J. I. Case Corp., Misc.2d 286 N.Y.S.2d 711 2d 1 Vexing (Sup.Ct.1967) ; Comment, Prob It is incumbent on the courts of Alaska to Purely Economic Loss lem of provisions of the Uniform enforce the Com- Remedy, Liability: Injury in An Search of applicable, including mercial when Code Hall L.Rev. Seton unconscionability doctrine of embodied LeVan, judicial Particularly 44.Prince close scruti- 45.05.072. ny 1971). when a manufacturer exacts warranted person First, tion over a in an sis. served action upon he focused whether the procedure jurisdictional according requisites rules of civil of AS 09.05.-

015(a)(4) were satisfied. The damage to injury (4) claiming in an to the supplied action aircraft “injury person property arising property” required or this state . by the statute. injury coupled out of an act or out of this This omission by defendant, provided, state addi- solicitation by activities carried on [t]he tion, that at the time either or on behalf of Hamilton Aircraft (A) solicitation or service activities Alaska and the known use Alaska of on in were carried this state or on be- two of the Hamilton manufactured Tur- defendant; half of the or boliners in the ordinary course of trade (B) products, things or materials provided a sufficient for obtaining basis processed, served manufactured personal jurisdiction under the terms of consumed in defendant were used or long Alaska’s arm statute.45 ordinary this state in of trade. course Second, the court turned to the provision interpreted statutory whether application long of Alaska’s Corp., Jonz v. Garrett/Airesearch arm statute to nonresident manufactur- (Alaska 1971), which involved er process would violate the due clause of airplane in Arizona manufactured the 14th Amendment to the federal consti- Corporation Hamilton and leased Aircraft doing, tution. so the Jons court re- to an The aircraft Alaskan resident. Slope stated the familiar test crashed articulated on Alaska’s North brought Alaskan lessee suit in Fairbanks Supreme United States in Interna- Court damages Hamilton for attributable tional Washington46 Shoe Co. v. and its negligent design manufacture and of the progeny:47 jurisdiction aircraft. Personal was based process is when a satisfied non- [D]ue 09.05.015(a)(4) by on AS and service was mini- resident defendant has established way of Alaska’s Commissioner of Com with the state ‘such mum contacts forum superior merce. The court set aside the that the maintenance of suit does not service and dismissed the for want suit play offend of fair ‘traditional notions personal jurisdiction, but this court re 48 justice.’ and substantial versed, personal holding the exercise of jurisdiction proper under the statute and Having previously held Alaska process. consistent with due long arm is an juris- statute assertion of permitted diction to maximum extent Boney, writing Chief for the Justice by process,49 due this court Jons, in noted: employed two-stage analy- court 49. Stephenson 423, v. Duriron 401 P.2d 45. 490 P.2d at ; 1965) Supply, Northern Inc. 310, 154, 46. 326 U.S. S.Ct. L.Ed. Curtiss-Wright Corp., 1013, 1016- (Alaska 1965) 10.05.642, (holding that AS Virginia, 47. Travelers Health Ass’n v. process statute, juris the service of extends 927, U.S. 70 S.Ct. 94 L.Ed. diction of Alaska courts to “the outer limits (1950) ; McGee International Ins. Life process of the due clause federal con L.Ed.2d U.S. S.Ct. stitution”). Enterprises, Accord Jones Inc. Denckla, Hanson v. 357 U.S. Corp., (9th v. Atlas Serv. F.2d 1136 Cir. 78 S.Ct. L.Ed.2d 1283 1971). Enterprises, In Jones 09.05.015 Note, In also Personam Jurisdiction jurisdiction long was to confer construed arm Over Nonresident Product Manufacturers engineer prepared over a subcontractor who Actions, 63 Mich.L.Rev. ing designs drawings Alaska for outside apartment Anchorage collapsed an house that 1199, quoting during earthquake. Although 490 P.2d at International the 1964 Washington, 310, 316, designs drawings supplied Shoe Co. v. 326 U.S. Alaska, 66 S.Ct. 90 L.Ed. another contractor outside fact personal its answer jurisdiction Alaska occurrence motion, peril the defense waiving at the omission by an act or allegedly caused pursuant 12(h). the defend is to Rule Once of Alaska of itself defendant outside power dispute ant put has into the court’s such a with Alaska. While contact however, defendant, over sufficient, alone, a nonresident not taken contact establish, plaintiff Alaska, burden falls on with establish minimum contacts statute, perhaps long resort to the arm by way of additional contacts very little prima jurisdiction.51 case of satisfy process.50 facie shown due need be when the comes challenge We note that Aircraft knew that Evidence that Hamilton quash long the form of a motion to arm being operated airplane pursuant 10.05.- process service of to AS Alaska, entirely use was that such plaintiff precisely the burden on the foreseeable, was to be sufficient addi- held the Alaskan to establish that same: con- contact to establish minimum tional constitutionally conveys statute the trial tacts with Alaska. jurisdiction court over this nonresident at In the case bar the trial court was instance, In defendant.52 either the burden opinion personal jurisdiction was is on plaintiff come forward established evidence adduced. not jurisdictional evidence. little evidence was offered on the Precious all, large of a issue measure because its answer the defendant de dispute parties concerning the between the corpo nied foreign Moon that New was a jurisdiction. proving burden of Each side ration doing business Alaska and contended continues to contend that alleged personal jurisdiction want of as an proof in the first instance the burden “affirmative defense.” An affirmative de upon devolved the other. fense is a new matter in the not set forth complaint complete serves de as a

Although previ has this court party raising fense to af it.53 ously speak had occasion to to this is generally firmative defense bur sue, bears the the law clear. seems rather Alaska proof den of as to that The Mor issue.54 requires 12(b) Rule Civil Procedure rows argue that for this New Moon plead reason defendant to the defense of lack of Ltd., (S.D.Iowa 1968) F.Supp. design knew subcontractor Wilmington Corp., product Tice v. Chemical work ultimate destination of its was (1966) ; Victory Iowa N.W.2d a contact render Alaska was sufficient to Carriers, Hawkins, subject long v. Inc. 44 Haw. the subcontractor to Alaska’s jurisdiction. Enterprises, P.2d 314 In arm Judge Jones heavily Duple relied Hufstedler Goldthwaite, 83, 460 52. White v. 204 Kan. Bodies, Hollingsworth, Motor Ltd. v. 417 F. (1969) ; Young Spring & Wire P.2d 578 Corp. (9th 1969), 2d in which Cir. the due (Fla.1965) ; Smith, v. 176 So.2d 903 process clause was held satisfied when the Cal.App. Callar, v. Detsch & Co. long Hawaii arm statute used obtain was to Cal.Rptr. (1964) ; & Proctor 2d personal jurisdiction English over an manu Superior Court, Schwarts, v. 99 Cal. Inc. body collapsed a facturer of coach that when App.2d 376, P.2d Duple, a bus tour commission overturned. Miller, Wright generally Federal and A. C. coupled of a tortious act Hawaii with 1351, at Procedure: Civil § Practice and Vauxhall, manufacturer’s sale of the coach to 561-62 knowledge manufacturer, the chassis with Leibold, 53. Rollins v. Hawaii, that the coach met was destined (Alaska 1973). requirements process. of due (Alaska Buchner, v. 386 P.2d 836 Evans (footnotes omitted). 50. 490 P.2d at 1199 1963) Ridgeway North Terminal v. Star Stevedoring Lycoming Corp. Superior Div. Avco of Archibald, 1963) ; Court, 2d Ariz.App. Rees 6 Utah 524 P.2d 1323 Wilson Hampton, 311 P.2d Int’l Bank v. O’Hare California (7th (Illinois P. 1971) law); R. R. 94 Cal. F.2d 1173 Cir. Packaging Plastics, Corp. Midwest v. Oerlikon of es- tive the burden in this case defendant encouraged should bear should be plead to tablishing personal jurisdiction. lack defense if affirmatively he is in any ability doubt as put to his to the mat Procedure Alaska Rule Civil ter in issue under a pen denial.58 Such corresponding fed after the 8(c), modeled alty impede quick would identification of rule,55 “set requires a defendant to eral disputed contrary issues and would be affirmatively” its defens forth affirmative to spirit the liberal of Alaska’s rules of may to so constitute es. Failure do pleading.59 We therefore hold New Perhaps out waiver of those defenses.56 Moon’s designation erroneous of its chal here of caution New Moon an excess lenge personal jurisdiction to an “af jurisdictional as an af reiterated its claim firmative defense” did not alter the burden defense, designation it firmative proof issue, in this which in the first in It is now dismisses as a “semantic error.” stance fell to the Morrows. personal jurisdiction, that absence clear viewed, properly not de an affirmative The record demonstrates fense; allegation particular this case, however, raises no new New Moon simply did matter but denies the existence of more than commit a “semantic error” plaintiff’s in drafting one of the elements in case. pre-trial pleadings. its then is the What effect of erroneous memorandum of New Moon states that it designation specific personal prove denial of intended to jurisdic lack of jurisdiction as an affirmative defense? evidently tion. This indicated to Mor opinion We are of the does rows that New Moon had assumed the bur shifting proof warrant the burden of on den proof jurisdictional question, on the purpose the issue defendant. and New Moon nothing said con requirements the pleading 8(c) trary of Rules closing until arguments. cannot We notice, 12(b) simply pro one of know whether and to what extent the Mor plaintiff summary a general vide rows prepared had evidence to refute the opponent’s purported of his proof defenses sufficient of New Moon that it was fairly prepare enable him to not doing trial.57 business in jurisdiction, proof We are convinced that such notice was forthcoming during was never provided case, particularly light in this the trial. The may Morrows well have juris of the fact that jurisdictional the defendant denied chosen present not to evi diction as well as raised the af defense dence on their own initiative for fear of firmatively. appropriate undermining course of persistent ac (if mistaken) their simply tion is the matter as if consider contention that the proof burden of upon raised disregard a denial and to the la superi- Moon. Inasmuch as the bel “affirmative defense.” would be un court It declined to rule on the burden penalize wise to by shifting trial, the defendant until after the close proof case, the burden to him this Morrows opportunity never had the present jurisdictional since the list of affirmative defenses in evidence once their 8(c) purport Rule assumption does not to be exhaus erroneous In disabused. States, 8(c). F.Supp. (D.Ill.1954), United 55. Fed.R.Civ.Pro. grounds, (7th reversed on other 220 F.2d in, (Alaska 56. Merrill v. Fait 430 P.2d 913 ; Rayon Consulmts, 1955) v. Mueller Cir. 1967) Corp. Trio L. Process v. Goldstein’s Inc., (S.E.N.Y.1959); F.Supp. Cf. Inc,., Sons, denied, (3d Cir.), cert. 461 F.2d 66 Surgical Schaible Fairbanks Medical & 409 U.S. 93 S.Ct. 34 L.Ed.2d 262 Clinic, Inc., (Alaska 1975). Sulphur Robles, Texas Co. Gulf generally, (Wyo.1973). Wright Miller, supra P.2d 58. C. and A. note Miller, supra Wright C. & A. § note 1278. 1278 at 352. § Blonder-Tongue Labs, University Surg- Inc. v. 57. Schaible v. Fairbanks Medical Cf. Foundation, Clinic, Illinois ical U.S. S. P.2d (1971) ; Sly 1975). Ct. L.Ed.2d being liable would result in manufacturers justice re- we think these circumstances unlimited op- damages of unknown and given quires that the Morrows be by the scope.1 concept This is embraced proce- unusual portunity. light In majority, that the manufactur- case, which notes affirm developments in this dural rely- liability by may minimize er who now superior for failure of court’s dismissal provisions in ing on the Uniform deceptive certain jurisdiction encourage would Code, to do would be unable liti- Commercial strategems stages formative liability were so if the doctrine of strict opponent’s pre- gation. on the Reliance essence, applied. position intimates undermined, trial memorandum would be rights under the Uni- specified in manufacturers’ pre-trial procedures and the main- should be form Commercial Code trap even become Civil Rule 16 could predictability tained in order to assure the fairness unwary. interests of In the potential liability. of their pre- judicial efficiency, this must be Consequently, we order that this vented. I Peters of the Cali agree with Justice cause be remanded for a new trial Court, separate Supreme in his fornia opportunity which Morrows will have the Co.,2 opinion in Motor not Seely v. White case, every to establish of their in- element expressed by ed that the ma the concerns personal jurisdiction cluding over New jority in for all this case would intents and Moon. purposes be eliminated if the notion of liability in the strict doctrine “defective” Reversed and remanded for a new trial concept viewed co-extensive with the opinion. with this accordance “unmerchantability” in the warran ty field. The term has been well defined ERWIN, (concurring). Justice meaning case law and has a fixed so opinion, I concur with the I would While far as the Uniform Commercial Code is concept liability cov- extend the of strict concerned. rather than use war- er “economic loss” If the doctrine of strict ranty theory by majority. advanced one, adopted present for cases such as the history products liability law does consumer, ordinary bargaining whose not justify a distinction between power equal is seldom the manufactur- primary property damage. ers’, opportunity bring would have the in- purpose liability rule is to of the strict original wrongdoer, an action injuries resulting sure that the costs of instead o'f the local retailer who served as products are borne from defective than little more a conduit for the defective put products on manufacturers that product. The costs of such an action than the consumers the market rather properly would be borne the manufac- powerless protect themselves. who are procedure recognizes turer. average sophistication consumer’s lack of dichotomy between in favor of Those respect complex to the world of com- types damage “economic loss” and merce the Uniform Commercial Code. argue of the distinction that an abolition Cal.Rptr. 17, truth, 63 Cal.2d limitations such as 1. In XJraetical attorney hiring be a deter would cost Hence, only cases similar rent to most suits. loss a substantial the instant one where litigation. would result involved

Case Details

Case Name: Morrow v. New Moon Homes, Inc.

Court Name: Alaska Supreme Court

Date Published: Mar 26, 1976

Citation: 548 P.2d 279

Docket Number: 2206

Court Abbreviation: Alaska